A sharp fall in global crude oil prices over the past 11 days could translate into significant relief for Pakistani consumers, with petroleum product prices expected to be revised downward from August 16.

Major decline in global oil prices

In the last 11 days, US crude oil prices have dropped by $5.71 per barrel, falling from $69.26 to $63.48 in the international market. British Brent crude has seen a similar dip, declining by $5.72 per barrel, now trading at $65.98 compared to $71.70 earlier this month.

Drop in local petrol and diesel prices?

According to market estimates, the ex-refinery price of diesel in Pakistan could decrease by Rs10 to Rs12 per litre, while petrol prices may see a smaller drop of up to Re1 per litre.

Also Read: Govt slashes petrol price by Rs7.54 for next fortnight

The Oil and Gas Regulatory Authority (OGRA) will send its final price calculation to the Ministry of Finance on August 15. The federal government, after the prime minister’s approval, will issue a formal notification setting the new rates, which will be effective from August 16 to August 31.

Govt role in price adjustment

Under existing regulations, the federal government has the authority to increase or decrease petroleum prices in line with global market trends.

On July 31 midnight, the federal government announced revised petrol and diesel prices for the next fortnight, effective from August 1.

Current petrol and diesel prices in Pakistan

According to a notification issued by the Ministry of Finance, the price of petrol was reduced by Rs7.54 per litre, while the price of diesel increased by Rs1.48 per litre.

The new price of petrol was set at Rs264.61 per litre. Diesel was being sold at Rs285.83 per litre.

While the federal government reduced petrol prices by Rs7.45 per litre in response to declining global crude oil prices, the move was largely offset by a significant increase in petroleum levies, denying consumers substantial relief.

Also Read: Petrol price decrease: Consumers paying Rs100 per litre in taxes

According to informed sources, the levy on petrol and diesel was increased by Rs2.55 per litre, raising the total levy to Rs78.02 on petrol and Rs77.01 on diesel. This hike in petroleum levy came into effect alongside the new fuel prices on August 1.

In addition to the revised petroleum levy, a climate support levy of Rs2.50 per litre remains in place on both petrol and diesel, adding to the overall cost burden on consumers.

Further contributing to the increase, the freight margin on diesel was raised by 20 paisas, bringing it to Rs6.24 per litre. On top of this, dealer margins on both petrol and diesel stand at Rs8.64 per litre, while distributor margins are Rs7.87 per litre.